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3 Lessons Learned by Public Pensions in 2014

hedge funds

Hedge Funds Are Not Bad and Should Not Track Broad Market Indices

For hedge funds, institutional investor enthusiasm has cooled, compared to pension fund interest in real assets such as infrastructure and properties. In 2014, the California Public Employees’ Retirement System (CalPERS) dumped its absolute returns program. Other pension funds are looking to reduce hedge fund exposure. UK-based Railways Pension Scheme is seeking to reduce its £1 billion allocation to hedge funds. Hedge funds that failed to generate double digit returns in 2013 took a beating in pension investment committees. Hedge fund proponents contend that fund underperformance is consistent with the asset class having low beta and low correlation to equities. Hedge funds weren’t designed to track the Russell 2000 or S&P 500 index.

Public pensions still have a long way to go when it comes to funding obligations.

You Can Sue Your Investment Consultant for Lousy Advice

Investment consulting giant Towers Watson is being sued for more than £47 million (US$ 72 million) from a mid-sized UK pension fund. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

CIC Sells 10% Logicor Stake to Blackstone Fund

The China Investment Corporation (CIC) is selling a 10% stake of in European warehouse firm Logicor Ltd to a real estate fund managed by The Blackstone Group. Furthermore, CIC also hired Blackstone to oversee and manage Logicor’s warehouses and logistic properties portfolio.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Fintech Affirm Raises $200 Million in Series E Led By Singapore’s GIC

Affirm Inc., a financial technology firm which provides instant loans to consumers as an alternative to credit cards for their online shopping, has raised US$ 200 million in a Series E round lead by Singapore’s GIC Private Limited, with participation from Khosla Ventures, Lightspeed Venture Partners, Spark Capital, Caffeinated Capital, and Ribbit Capital. The new infusion of capital brings the San Francisco-based company’s total funding to US$ 450 million and a reported valuation of US$ 2 billion.

The company is founded by Max Levchin, a co-founder of PayPal (part of the PayPal mafia, dubbed by the tech press). Max Levchin is also an advisory board member of the Consumer Financial Protection Bureau (CFSB) in the United States.

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CHANGE: Saudi Arabia to Re-Open Movie Theaters, PIF Inks MoU with AMC

The Saudi Arabian government is ending its 35-year ban on cinemas. Next year, the government will allow cinemas to open. This watershed moment provides opportunities for entertainment companies to invest in Saudi Arabia and the surrounding region.

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